fin acc A review of the ledger of Dempsey Company at December 31, 2014, produces
ID: 2379452 • Letter: F
Question
fin acc
A review of the ledger of Dempsey Company at December 31, 2014, produces these data pertaining to the preparation of annual adjusting entries. Prepaid Insurance $19,761. The company has separate insurance policies on its buildings and its motor vehicles. Policy B4564 on the building was purchased on July 1, 2013, for $13,410. The policy has a term of 3 years. Policy A2958 on the vehicles was purchased on January 1, 2014, for $8,586. This policy has a term of 18 months. Unearned Rent Revenue $489,750: The company began subleasing office space in its new building on November 1. At December 31, the company had the following rental contracts that are paid in full for the entire term of the lease. Notes Payable $42,400. This balance consists of a note for 6 months at an annual interest rate of 7%, dated October 1. Salaries and Wages Payable $0. There are 8 salaried employees. Salaries are paid every Friday for the current week. 6 employees receive a salary of $630 each per week, and 2 employees earn $710 each per week. Assume December 31 is a Wednesday. Employees do not work weekends. All employees worked the last 3 days of December. Prepare the adjusting entries at December 31, 2014. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)Explanation / Answer
1.
(13410*1/3)+(8586*1/2)
8763
Debit Insurance Exp 8763
Credit Prepaid Insurance 8763
2.
(2*5*5130)+(1*5*8630)
Debit Unearned Rent Revenue 94450
Credit Rent Revenue 94450
3.
((42400*.07) /12)*3)
Debit Interest expense 742
Credit Interest payable 742
4.
(630*6)+ (710*3) =5910
Debit salaries expense 5910
Credit Salaries payable 5910
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